Hackney to start a housing company offering Living Rents to help fund more council homes

Mayor Philip Glanville on a building site (Photo: Twitter)

Hackney Council has agreed to set up a private housing company to get around government restrictions and provide homes for London Living Rent.

In a cabinet meeting on Monday night (22 January), members approved plans to set up a housing company wholly owned by the council, and governed by the Mayor and cabinet.

The company will use a £10 million loan from the council to buy homes built through council regeneration schemes which are up for shared ownership or outright sale.

The homes can then be rented out at the London Living Rent, which is two-thirds of market value and usually around £1,000 per month for a two-bedroom flat.

Residents applying for these homes would also benefit from a longer than average tenancy and save on private sector fees and charges.

Some of the homes will be rented out at market value – around £1,800 per month – earning the council money through the housing company’s dividends.

The council says this extra revenue will go into its Housing Revenue Account (HRA) – saving it from borrowing more money, and funding the building of more council homes.

Speaking to cabinet, Mayor Philip Glanville said the plans for a housing company represent “a significant movement in terms of delivering those London Living Rent homes and also a better private sector here in the borough”.

Cabinet approved the plans for a housing company at Monday’s meeting

He stressed that the company would not be building homes, as do similar schemes in other boroughs, and will not affect the council’s ongoing plans to build council homes directly.

The Mayor said: “It’s not a development company, as some other local authorities have been pioneering.

“We’re not seeking to use this company to do that kind of work. That will continue to take place within the council, within the HRA, delivering the housing regeneration programme and the housing supply programme [which has] already been to cabinet.

“But it allows us to move into that delivery of private rental homes.”

He added: “We continue to lobby for a better private rented sector. We continue to look for solutions to the housing crisis here in the borough, but this gives us a better toolkit.”

Council officers say starting a company means getting around government housing restrictions on living and market rents and secure tenancies, and avoids being forced to offer tenants the right to buy the flats.

“Too many people in Hackney, especially young renters, work hard and save hard but are struggling to make ends meet because of rocketing rents in the private sector,” said the Mayor in a statement after the meeting.

“These homes for living rent will help those struggling to stay in Hackney or save for their first home – putting an extra £800 on average in their pocket every month to save towards a deposit.”

He added: “We’re building thousands of new council homes for those most in need, and I’m proud that our living rent will expand our offer to help those who aren’t eligible for social housing but still need a hand to find a genuinely affordable place to live.”

You can read more about the plans here.